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ISLAMABAD: The talks between Pakistan and the International Monetary Fund (IMF) for the 7th review under the $6 billion Extended Fund Facility (EFF) programme remained inconclusive, as the Fund pointed out ‘deviations’ on fiscal sides from the policies agreed in the last review. Resultantly, no staff level agreement was reached on Wednesday while the revival of $6 billion EFF delayed.

The Fund emphasized the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the fiscal year 2023 budget, to achieve programme objectives. The IMF statement indicates that the government would be taking prior actions in the federal budget for fiscal year 2022-23. The revival of stalled programme can be expected by end of July/August 2022.

The Fund issued the following statement after the talks’ conclusion in Doha:

“An International Monetary Fund (IMF) mission led by Nathan Porter held both in-person and virtual discussions in Doha, Qatar with the Pakistani authorities during May 18-25 on policies to secure macroeconomic stability and support sustainable growth in Pakistan.

At the conclusion of the mission, Porter, issued the following statement:

“The mission has held highly constructive discussions with the Pakistani authorities aimed at reaching an agreement on policies and reforms that would lead to the conclusion of the pending seventh review of the authorities’ reform program, which is supported by an IMF Extended Fund Facility arrangement.

Considerable progress was made during the mission, including on the need to continue to address high inflation and the elevated fiscal and current account deficits, while ensuring adequate protection for the most vulnerable. In this regard, the further increase in policy rates implemented on May 23 was a welcome step.

On the fiscal side, there have been deviations from the policies agreed in the last review, partly reflecting the fuel and power subsidies announced by the authorities in February. The team emphasized the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the FY2023 budget, to achieve program objectives.”

“The IMF team looks forward to continuing its dialogue and close engagement with Pakistan’s government on policies to ensure macroeconomic stability for the benefit all of Pakistan’s citizens.”

Copyright Business Recorder, 2022

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